Goldman Sachs downgrades Ryanair to 'neutral'

(Sharecast News) - Goldman Sachs downgraded Ryanair on Monday to 'neutral' from 'buy' and cut the price target to €27.5 from €29.5. The bank said its investment case on the budget airline going into 2025 was based on two main factors.

Firstly, that the stock would see FY26 earnings per share upgrades largely driven by a larger negative OTA (Online Travel Agents) impact in FY25 than consensus had factored in. Secondly, that there was a high likelihood of the PE re-rating from low levels on the removal of ownership restrictions.

"As these catalysts have largely played out we now have a less differentiated/slightly more cautious earnings view relative to (Bloomberg/Visible Alpha Consensus Data) consensus...while the valuation has normalised from low levels," it said.

Goldman said that in terms of estimates, it now sees the outlook as more mixed relative to consensus.

"Looking at FQ2 (upcoming report) we forecast €1.63bn net profit versus consensus of around €1.7bn, while for FY26 overall our forecast is broadly in line around €2.2bn.

"This reflects on the one hand slightly softer fare data for summer than we had previously anticipated coupled with higher SAF (Sustainable Aviation Fuel) costs than we had previously modelled; on the other hand consensus for the winter quarters FQ3+4 looks like a low bar to us, offsetting our slightly lower FQ2 forecast for FY26 overall."